Woulk Company has a debit balance of $8000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on review and aging of its accounts receivable at the end of the year Woulk estimates that $60000 of its receivables are uncollectible. The amount of bad debt expense which should be reported for the year is:
A) $8000.
B) $52000.
C) $60000.
D) $68000.

Question

Quizplus · Accepted Answer

The correct amount of bad debt expense is $68,000. This is calculated by adding the existing debit balance of $8,000 in the Allowance for Doubtful Accounts to the new estimate of uncollectible receivables of $60,000. This adjustment ensures the allowance account reflects the estimated uncollectible amount accurately.

Woulk Company Has a Debit Balance of $8000 in Its